The cost of using borrowed capital affects the cost of investment, so credit interest rates are an important factor affecting investment decisions and total investment demand in the economy. When interest rates are low, investors will receive higher net profits from investment, or in other words, the rate of return on investment projects increases. And so, many investment projects will be implemented, increasing the demand for investment in the economy. That is a major factor leading to economic growth. Therefore, applying a low interest rate policy is considered the key to promoting investment and economic growth.
As a tool for macroeconomic adjustment, credit is also an important and effective tool of the State to encourage and orient the development of SMEs. The use of this tool is carried out through many different measures, but can be focused on the following main methods:
- Preferential credit.
Preferential credit is an important measure in using credit tools to encourage and orient the development of SMEs.
In preferential credit, the State is the main provider of credit to SMEs at low interest rates. Preferential credit plays an important role in promoting and guiding the development of SMEs. Its role is shown in:
The first is to enhance financial capacity for SMEs.
The biggest limitation of SMEs is low capital, which limits the equipment, machinery and advanced technology, and also makes it difficult to expand business operations. With preferential credit, business capital has been increased for enterprises. When the Government lends capital at low interest rates, it actually provides a financial subsidy to enterprises.
On the other hand, low-interest loans are seen as a way to reduce investment costs and increase the profitability of businesses.
The second is to promote businesses to invest in implementing priority socio-economic goals according to the State's orientation.
Preferential lending is linked to incentive goals for certain sectors, industries, and regions, such as preferential credit for technological equipment innovation, preferential credit for export, and preferential credit for investment in disadvantaged areas.
Thus, along with the provision of preferential credit, the State has implemented development orientation for enterprises. Preferential credit in a market economy is implemented in conjunction with certain socio-economic goals according to specific programs. On the other hand, preferential credit only provides enterprises with the ability to implement investment results and according to investment progress. Preferential credit is used as an economic lever to stimulate and promote the development of enterprises.
Preferential credit sources for SMEs are mainly capital from the State budget and capital contributions from foreign financial institutions and international financial institutions: and are formed in the form of investment support funds associated with investment programs according to certain objectives and are often used for medium-term and long-term loans at preferential interest rates. To conduct and manage investment support funds in countries where the funds are large in scale, Government financial institutions have been established specializing in providing credit assistance to SMEs.
Considering preferential credit, there is a difference between bank credit interest rates and preferential credit. Bank credit interest rates are formed in the market depending mainly on the supply and demand of capital in the market. Preferential interest rates are mainly decided by the Government based on economic development goals -
Social, it does not depend on the market but it is not therefore completely separate from the market interest rate.
- Capital support through credit guarantee fund.
Banks often limit lending to SMEs due to doubts about their ability to pay and also require them to have collateral. Many SMEs face many difficulties because after a period of operation, they need to borrow capital to expand their production and business activities but do not have enough collateral, or enough collateral to ensure their ability to pay to lending banks.
The model requires the State to establish a credit guarantee fund for SMEs. The fund operates as a financial institution of the Government. The fund's capital can be mobilized from the State budget, from contributions from financial institutions and domestic credit institutions. The credit guarantee fund guarantees loans without collateral. When a business has a feasible investment plan, the business can request a credit guarantee fund to guarantee the loan. After consideration, if the credit guarantee fund accepts, this credit guarantee fund will be a third party to guarantee the business, committing to the lender to guarantee debt payment when the business borrows capital but cannot fulfill its debt repayment obligations on time. Depending on the size of the fund, the priority level determines the scope of guarantee and limits the amount of credit guaranteed by the Fund.
With this model, businesses will have more opportunities to access bank loans through the support of credit guarantee funds. These businesses will have their capital sources unlocked, increasing their ability to borrow. The State can share risks with lenders, encourage banks and credit institutions to expand credit provision to SMEs, because the State is always behind, the one who will guarantee the risk in case the business is unable to pay.
- Hire purchase credit form
This is a form of medium and long-term credit through asset leasing. The lessor leases the asset and holds ownership of the leased asset. The lessee uses the leased asset and pays the rent during the lease term agreed upon by both parties and cannot cancel the contract before the term. At the end of the lease term, the lessee can transfer ownership, buy back or continue to lease the asset according to the terms agreed upon in the lease.
Characteristics of this form: the lessee is the one who chooses the necessary assets for lease. During the contract implementation, the lessor holds ownership of the assets and the lessee has the right to use the assets. Neither party has the right to cancel the contract before the term. This form is more secure. For SMEs, this is considered a suitable and effective form of capital provision: providing medium and long-term capital; renovating machinery and equipment; improving the financial situation and the enterprise does not have to record additional debt in the balance sheet, so the debt ratio is kept low, the enterprise can continue to borrow capital from other sources to expand its business activities.
- The state or associations act as intermediaries so that businesses can access capital from commercial banks.
To borrow capital, enterprises, in addition to having a feasible project, also need collateral to ensure payment ability. Normally, it is very difficult for SMEs to access capital sources from commercial banks because the way of evaluating projects between banks and enterprises is not consistent, there are different analysis methods. Therefore, the State or associations acting as intermediaries will help these enterprises a lot in accessing capital sources from commercial banks.
CHAPTER II
RESEARCH ON THE USE OF VIETNAM'S FINANCIAL POLICY IN ORIENTATION,
ENCOURAGING THE DEVELOPMENT OF SME AND EXPERIENCES OF SOME COUNTRIES IN THE WORLD
2.1. Some features of Vietnamese SMEs
2.1.1. On the number of SMEs and capital scale
In recent times, thanks to the birth of the Enterprise Law 2005 and the Investment Law 2005, there have been positive impacts on the development of Vietnamese SMEs, contributing to creating a more open and equal business environment for all types of businesses.
In terms of quantity, by the end of 2007, there were about 300,000 enterprises established nationwide, of which if calculated by labor criteria, the number of SMEs accounted for about 96%, and if calculated by registered capital criteria, it accounted for about 88%. These enterprises are contributing about 30% of the total industrial output value, creating jobs for nearly 3 million workers, accounting for 26% of the country's workforce, creating about 49% of jobs in the non-agricultural sector. The proportion of GDP that SMEs contribute to the economy is increasing. If in 1999, the proportion of GDP of SMEs accounted for only about 8.01%
; in 2002 it accounted for 9.02%, by 2004 this rate was about 24% and in 2006 the contribution rate was about 26% of GDP.
SMEs participate in most sectors of the economy, with businesses focusing most on trade, engine and motorbike repair (40.6% of businesses); followed by processing industries (20.9%), construction (13.2%) and the remaining industries such as property trading, consulting, hotels and restaurants (25.3%).
It is worth noting that 24% of private enterprises operate in the fisheries sector and 26% of non-state joint stock companies operate in the credit and finance sector, of which 37.3% are in the processing industry sector.
Number of SMEs operating in the food processing industry, 11% in the textile, footwear and leather industry and 18.6% in the metal products manufacturing industry (4) .
25%
3%
Commercial Services
41%
21%
Hotel restaurant
Processing industry
Other industries
Chart 2.1: Business structure of SMEs
When the Enterprise Law took effect (January 1, 2000), there were over 14,457 newly registered enterprises, the number in 2001 was 19,800 enterprises, in 2002 there were about 20,803 newly established enterprises, in 2003 there were 26,023 newly registered enterprises and by 2007 there were about 50,125 enterprises registering for business, about 3.5 times more than in 2000, with a total registered capital of 160,400 billion VND.
Table 2.1: Number of newly registered SMEs in the period 2000-2007
Year
Quantity business | Registered capital (billion VND) | Average capital per enterprise (million VND) | |
2000 | 14457 | 13904.4 | 961.8 |
2001 | 19800 | 25770.1 | 1301.5 |
2002 | 20803 | 36736.2 | 1765.9 |
2003 | 26023 | 54212.1 | 2083.2 |
2004 | 36795 | 75125 | 2041.7 |
2005 | 45162 | 108000 | 2391.3 |
2006 | 46663 | 148065.3 | 3173 |
2007 | 50125 | 160400 | 3200 |
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![Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branchs income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giangs profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project Restructuring the system of credit institutions in the period 2011-2015 approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services.
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giangs products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Ministers Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giangs treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giangs income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giangs corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giangs card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015
zt2i3t4l5ee
zt2a3gsnon-credit services, joint stock commercial bank
zt2a3ge
zc2o3n4t5e6n7ts
At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income.
Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015
Unit: Billion VND
140
120
100
80
60
40
20
0
63.3
80.34
89.29
110.08
131.99
2011 2012 2013 2014 2015
Profit before tax
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services".
2.2. Current status of non-credit service development at BIDV Tien Giang.
2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times.
Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,...
2.2.1.1. Payment services:
In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc.
Chart 2.3. Net income from payment services in the period 2011-2015
Unit: Million VND
6000
5000
4000
3000
2000
1000
0
3922 4065
4720 5084 5324
2011 2012 2013 2014 2015
Net income from payment services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment.
2.2.1.2. Treasury services:
BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17].
Chart 2.4. Net income from treasury services in the period 2011-2015
Unit: Million VND
350
300
250
200
150
100
50
0
105 122
309 289 279
2011 2012 2013 2014 2015
Net income from treasury services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services.
2.2.1.3. Guarantee and trade finance services:
BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance.
Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015
Unit: Million VND
14000
12000
10000
8000
6000
4000
2000
0
5193 5695
2742 3420
8889
3992
11604 12206
5143 5312
2011 2012 2013 2014 2015
Net income from guarantee services Net income from Trade Finance
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area.
are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future.
2.2.1.4. Card and POS services:
As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services.
In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system.
Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments.
Chart 2.6. Net income from card services in the period 2011-2015
Unit: Million VND
3500
3000
2500
2000
1500
1000
500
0
687
1023
1547
2267
3104
2011 2012 2013 2014 2015
Net income from card services
(Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24])
Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25].
Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area.
Unit: Machine
STT
Bank name
Number of ATMs
Cumulative number of ATM cards
POS machine
1
BIDV Tien Giang
23
97,095
22
2
BIDV My Tho
7
21,325
0
3
Agribank Tien Giang
29
115,743
77
4
Vietinbank Tien Giang
16
100,052
54
5
Dong A Tien Giang
26
97,536
11
6
Sacombank Tien Giang
24
88,513
27
7
Vietcombank Tien Giang
15
61,607
96
8
Vietinbank - Tay Tien Giang Branch
6
46,042
38
(Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21])
Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6).
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(4) www.kenhdoanhnghiep.vn/cms/detail.php?id=1198
Source: CIEM
Thus, in general, after 6 years of implementing the Enterprise Law, the number of DVNNV has increased many times compared to the previous 10 years. The average number of registered enterprises per year is now about 3.85 times the average per year of the period 1991-1999. This is a very high growth rate compared to the average in many countries in the world. According to business data in some European countries, the average number of newly established enterprises per year in these countries is only from 5% (like in Sweden) to as high as 13% (in the UK). The US is a country with a fairly high rate of newly established enterprises per year, but only at 11% per year (5) . However, if calculated per capita, for every 550-600 Vietnamese people, there is only 1 officially registered enterprise.
in the form of a company. This is the lowest level compared to other countries in the region (according to APEC's recommendation, countries should strive to have 1 business for every 20 people).
During the same period, the amount of newly registered capital also increased. In 2000, the total newly registered capital was only 13,904.4 billion VND, by 2002 it had increased 2.5 times to 36,736.2 billion VND. In 2007 alone, this figure reached 150,125 billion VND, nearly 1.5 times higher than in 2005 (108,000 billion VND).
After two important milestones, in 2000 the Enterprise Law was born and in 2006 the amended Enterprise Law 2005 took effect, the number of newly established enterprises and the amount of registered capital both increased.
(5) www.sba.gov
Number of enterprises Registered capital
250000
200000
150000
100000
50000
0
2000 2001 2002 2003 2004 2005 2006
Chart 2.2: Number of SMEs and annual registered capital
According to official statistics, not only registered capital but also the scale of operating capital of enterprises in recent years has had a significant growth rate, especially for the non-state-owned SME sector. While the operating capital in 2002 compared to 1995 of state-owned enterprises increased 3.5 times, that of non-state-owned enterprises increased 10.8 times. This shows a positive sign that enterprises have boldly invested capital in business investment.
Although in recent times, both registered capital and operating capital of Vietnamese SMEs have increased, the capital scale of Vietnamese SMEs is still small. According to estimates, up to 44.44% of enterprises have capital under 1 billion VND; from 1 to 5 billion VND, there are 33.21%, from 5 billion VND to under 10 billion VND, there are 8.24% of enterprises with capital from 10 billion VND or more, accounting for 14.11%. In general, the average capital of a Vietnamese SME is three billion VND, of which the average capital of a foreign enterprise is 210.24 billion VND (6) . With such a scale, Vietnamese SMEs are considered too small compared to the average scale in the world. For example, the capital scale of Vietnamese industrial enterprises can be compared with that of Chinese industrial enterprises in Table 2.2:
Table 2.2: Comparison of Vietnamese and Chinese enterprise scale
(6) www.sggp.org.vn/daututaichinh/2007/8/117294/